Vehicle auctions still felt effects of recession in 2013

recession

Sales of used cars and trucks through auto auctions increased to 8.2 million in 2013, but that still wasn’t enough for the industry to break out of its recessionary slump, based on results of a member survey by the National Auto Auction Association (NAAA).

Sales totaled 8.2 million vehicles out of 15.2 million offered in 2013, about 54.2 percent, NAAA reported. Total sales for 2012 were 7.9 million vehicles out of more than 14.5 million offered.

The percentage of vehicles sold, or conversion rate, was the same as 2012, the lowest on record.

The year-over-year results, however, tell only part of the story of the slump that hit its nadir in 2011.

Annual sales during the 2011-13 period marked the lowest level in the 17-year history of the survey, and the 54.2 percent conversion rate of 2012-13 also was the lowest on record. Conversion rates typically range between 57 and 61 percent, based on historic NAAA data.

Vehicles sold by NAAA member auctions in 2013 had a total value of $75.7 billion, an increase of $1.5 billion over 2012, but still the second-lowest total since 1998, based on NAAA survey records. The highest sales total on record was $88.8 billion in 2007.

The average price per unit was $9,210, the lowest in five years, and $200 less than 2012. The highest average price per unit was $9,722 in 2011, according to the report.

But at least one analyst expects improvement in the auction sales environment starting this year.

Higher new-car sales, especially those sold through leases and to rental-car companies in the past few years and this year, will fuel auction sales growth into the foreseeable future, Ira Silver, NAAA chief economist told Automotive News. “We’re going to see increases for a number of years,” Silver concluded. “This year, next year and maybe a couple of years after that.”

“Like the rest of the auto industry, auctions suffered as a result of the recession, which was deepest in 2008 and 2009,” wrote Arlena Sawyers in Automotive News. “But unlike new- and used-vehicle retail sales, which started to rebound in 2010 and 2011, auctions’ sales started to rebound in 2012.”

That’s because the auction business rises or falls about two to four years after changes in retail sales, when those vehicles re-enter the market as used vehicles, Silver told Automotive News.

NAAA’s findings were based on responses from 263 of the organization’s 325 North American members.

More details of the NAAA survey are available online.

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